Not long ago, InvestorPlace contributor Chris Lau asserted that online mobile multi-player video-game platform Skillz (NYSE:SKLZ) was at an inflection point. Notably, Lau cited the 17% short interest in SKLZ stock.

Granted, that level of short interest could make the stock a short-squeeze candidate for Reddit users. However, I don’t imagine that buying the shares in the hopes of a Reddit-fueled run-up is the ideal strategy.

Instead, I invite you to consider SKLZ stock as a hidden gem in the markets: a rare and valuable bargain at a time when asset prices are generally inflated.

And when there’s a mismatch between a company’s financial performance and the sentiment surrounding a stock, there’s a terrific opportunity for enterprising investors.

A Closer Look at SKLZ Stock

By that last statement, I meant that you should consider buying the shares of good companies when their stock prices drop.

That’s easier said than done, of course. SKLZ stock has fallen relentlessly, so it’s a difficult emotional decision to start accumulating its shares now.

How far down did it go? Put it this way: Skillz’s shares were priced at $46.30 at one point in February of this year.

By Aug. 11, SKLZ stock had declined below the $12 level. Clearly, the bulls have a lot of catching up to do.

Perhaps it’s a test to see if you’re a true contrarian. Do you have the emotional fortitude to buy the shares when the sentiment towards them is deeply negative?

Before you answer that, you’ll want to make sure that the company is in good financial shape. So let’s delve into the most recently reported data and see what we come up with.

Accelerating the Vision

To give you an inkling of how well Skills has performed on the financial front, I’ll offer you a snippet of a quote from Skillz founder and CEO Andrew Paradise (who has the best  name of any CEO that I’ve ever seen).

Commenting on the company’s Q2 results, Paradise reported that, “Skillz is pleased to report strong revenue growth for the 22nd consecutive quarter.”

That really says everything you need to know about Skillz as a company. I’ll give you more details about its recent results, but it’s clear that Skillz’s excellent quarter wasn’t just a fluke.

Here are the key points, for your convenience:

• Revenues increased 52% year-over-year to $89.5 million (a company record)
• $85.1 million in gross profits, up 52% over the prior year
• Gross margin was 95% during the quarter, in-line with the same quarter a year earlier.
• $608.5 million in gross marketplace volume (GMV), signifying a 47% YOY improvement.
• $692.8 million in cash on the balance sheet at the quarter’s end, and no debt

Entering a Partnership With Exit

Along with the financial achievements, Skills celebrated a quarter in which the company entered into a strategic partnership with a gaming technology up-and-comer.

That company is known as Exit Games, a Hamburg, Germany-based firm that develops synchronous multiplayer gaming technology.

Truly, Exit is a great fit for Skillz. Through a $50 million investment in Exit Games, Skillz will be able to accelerate its expansion into the racing, fighting and first-person shooter genres.

Paradise explained how his company’s Exit stake will ultimately make Skillz bigger, broader and more competitive:

“Expanding into these new areas will grow our total universe of players and allow us to capture an even greater share of their leisure time and spend, while also introducing the technology and infrastructure necessary to attract more of the hottest, most creative developers, publishers, brands, and iconic franchises to our platform.”

The Bottom Line

As you can see, Q2 was both eventful and lucrative for Skillz.

Somehow the market doesn’t seem to recognize Skillz’s true value as a company.

That should be perfectly fine for open-minded investors who are ready and willing to scoop up shares of SKLZ stock at its current, very reasonable price.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.